"All Games Will Be Kickstarted"

Kitfox's Tanya X. Short makes the case for compulsory crowdfunding. With flow charts.

The year is 2020. Kickstarter is now the standard funding model for video games. From indie darlings to the next Call of Duty, practically every game is crowdfunded. Japanese megacorps and a few daring rogues play outside the system, but a crowdfunding campaign is assumed to cap off pre-production, generally launched in conjunction with the game's announcement. The last three headliner announcement videos at Sony's E3 press conference all had crowdfunding campaigns attached, from a Brazilian newcomer's humble $30,000 Kickstarter up to Naughty Dog's ask of $200,000, hosted on their website.

I'm not exaggerating. In the next five years, either:

A) Kickstarter changes its terms, due to greed or legal sanctions

OR

B) Crowdfunding becomes a part of the majority of games developed, including AAA.

Whether it's a new IP, a sequel, or a spin-off, crowdfunding your game when it has a sweet announcement trailer just makes sense. Even if you don't need the money. Especially if you don't need the money. The point isn't to fund the game anyway - it's to start building your brand. In an increasingly crowded space, filled with people who don't click on advertisements, crowdfunding is the obvious choice.

"Crowdfunders don't expect us to pay them back except by making a great game"

I'm the Captain of Kitfox Games - president, CEO, lead designer, whatever. We're four nobodies up here in Montreal, Canada, and we just want to make great games. In this pursuit, we've received investments from venture capitalists, taken pay from publishers, accepted loans from a government agency, and run a successful Kickstarter. Hands down, the Kickstarter was the best source of cash for us - because it raised our profile, proved our concept had appeal, and plus, crowdfunders don't expect us to pay them back except by making a great game. Backers share our priorities, and want us to succeed. Unlike venture capitalists, lenders, or publishers, our backers would rather see us go on to make more games than take 20 per cent of our paycheck. No wonder we love them.

But even aside from the potential profit (which is honestly low in the scheme of things), the marketing advantage is enough to seal the deal.

Why?

You're a game studio. You have salaries to pay and want to get an idea of how well your game will sell. If you run a crowdfunding campaign, you will receive an additional chance at good PR, word-of-mouth, merchandising, and pre-orders, all for the low, low cost of a month or two of community manager salary. It lowers your risk in every way.

Even if the campaign fails to fund for some reason, you can always cancel the game or re-launch it with tweaked marketing later, all with less risk than if you waited until later in production. Even in the worst of cases, if the game needs to be cancelled after successful funding and you need to refund the money, usually these games cost upwards of $30 million anyway - refunding a few hundred thousand is cheaper than many license deals.

The first few days of our Kickstarter campaign were terrifying, of course, but less terrifying than launching a game into an increasingly crowded marketplace without any sense of how it would go. In start-up culture, business-types are fond of saying "fail early," meaning that new ideas should be tested before investing years. It's good advice not just for new inventions and apps - it applies to games, too.

And if you're a big corporation considering whether to spend dozens of millions of dollars on an idea, wouldn't it make sense to do a bit of a market test before investing those millions, rather than after?

But nobody would accept an Activision Kickstarter!

It's already happened in the board game space.

Kickstarter began as a place for the niche and desperate game designer to reach an unprecedented fanbase and fund projects that otherwise couldn't succeed. And when some of the biggest, most established board game publishers created Kickstarters, some people complained, but they succeeded, sometimes wildly. And this continues to happen.

The key difference is that board games have comparatively low production cost and risk, but high manufacturing cost. Thus, it's expected to complete a fully-functioning game before crowdfunding - much like video games must, before acquiring publishing deal.

"One of the primary weapons for overcoming skepticism is legitimacy. But guess who has more legitimacy? Activision-Blizzard has more than Kitfox does, I'll tell you that much"

Video games have a much higher production cost and approaching zero manufacturing, which causes more failure between pre-production and launch, which leads to heightened consumer skepticism. One of the primary weapons for overcoming skepticism is legitimacy. But guess who has more legitimacy? Activision-Blizzard has more than Kitfox does, I'll tell you that much.

As in every other kind of business, the rich and famous continue to have an advantage over our beloved underdogs. And lest you think my information is outdated, an old hoary IP from an established (though smaller) developer is raking in hundreds of thousands of dollars as I type this.

Terrible Reasons Not to Crowdfund

You are poor. Great - you need the money.

You are wealthy. Great - you can always try again.

You are a nobody. / Your brand/IP is new. Great - you need to get your name out there.

You are famous. / Your brand/IP is well-established. Great - you have a fanbase to mobilise.

You get funding from other sources. Great - you can have a very low goal.

You have a small team. Great - you can have a very low goal.

You have a large team. Great - their morale will be boosted by the success, even if they don't get a raise.

You don't have an artist. Great - hire one, or profit-share with one.

Plenty of developers make excuses as to not crowdfund. Most of the time, these excuses simply don't hold up to any logical scrutiny. Even free-to-play (or completely, utterly free) games can be crowdfunded, provided the backer rewards are appealing enough and/or the game's creator makes up for it in fame, good will, or other desirables.

So Literally EVERYONE Should Crowdfund?

Well, okay, fine, yes, there are a few good reasons not to crowdfund.

You don't have a game concept.

Your game concept is very, very difficult to imagine* without experiencing it, even with copious diagrams and game footage

You are known, to yourself and others, to be a liar, incompetent, gambling-addicted, and/or irresponsible.

You are ethically opposed to consumerism, "economic innovation", or money**.

Your last Kickstarter failed, you have no idea why, and/or blame things completely outside your control which have not changed.

* Note I said "imagine", not "understand". Comprehension isn't necessary, only a spark of excitement.

** I actually loathe money and related evils. I greatly desire a Star Trekkian utopia without capital, property, or finance industries. I will happily vote for the abolishment of all inheritances. But since I don't oppose money quite enough to stop creating and selling products, that theoretical opposition is not relevant here.

That's about it. In fact, I've even made you a handy flowchart to handle your concerns:

What's Next

I've spoken with developers who believe crowdfunding in its current form shouldn't be legal, as it conveniently uses the language of charity and investment while offering consumers the benefits of neither. In fact, Kickstarter rules specifically stipulate that it neither supports non-profit projects (presumably for tax reasons) nor permits financial rewards (such as profit-sharing that would appeal to investors).

To date, most court cases treat Kickstarter as a product catalog that sometimes doesn't deliver. What about the games that do deliver, sell the game for millions of dollars of profit, pocket the money, and then Kickstart again for the sequel? It's clearly in bad taste, buyer beware, etc, but how much predation is good business and how much is fraud? After all, we allow pre-orders months or years in advance, even of arguably overpriced "limited edition" sets of merchandise. Is there any difference?

"What about the games that do deliver, sell the game for millions of dollars of profit, pocket the money, and then Kickstart again for the sequel?"

It sure would be best if everyone mutually agreed to only crowdfund when they needed the money, wouldn't it? We can all see that the market is polluted when greedy suits come in and sharpen their blades against our wallets. Unfortunately, the tragedy of the commons means that the gold rushers will continue to deplete all of the goodwill for decreasing gain. If the demands for legitimacy from creators skyrockets and funding goals plummet, Kickstarter really will be only a marketing exercise. Bubbles burst, platforms mature, life goes on.

For my part, I don't know if Kitfox Games will Kickstart again. Game development is a crowded space, and maybe something better will come along to help us stay afloat, before our next project. If it makes sense, sure, we'll crowdfund again, and we hope we'll have your support, depending on how well Moon Hunters turns out.

Nearly 2,000 game projects funded on Kickstarter alone last year, earning $89 million. That's only a third the cost of Grand Theft Auto, but maybe that's because Rock Star hasn't launched a campaign yet. If (when?) they do, I imagine it'd be on their website, to dodge the Kickstarter fee. But even if we have to campaign alongside Rock Star (or Activision-Blizzard, or Ubisoft), we're happy to take any possible ripple effects from those monster marketers.

So let's get cracking. There's games to be made.

Tanya X Short is CEO/Captain at Kitfox Games

Sign up for The Daily Update and get the best of GamesIndustry.biz in your inbox.

When I first heard of Kickstarter I did think "ah great, a place for small developers who are doing risky projects to get funded" and when high profile developers started using it to fund their games I thought it was in bit morally grey. So I get where Marty is coming from, but at the end of the day people will put money where they think it will be best used and developers they know have made games before seem like a safe bet.

Sure, as a small developer you do get a little peeved off when big developers come in and hoover up all the cash, but this is the reality of game development and peoples risk management will usually favor the safer bet. You just have to make an awesome game and hope you can persuade enough people that you have the minerals to pull the job off and will live up to what you say you are doing.

The rest is pure luck from what I have seen.

Edited 1 times. Last edit by Darren Adams on 23rd January 2015 10:59am

I am not sure what Tanya X Short is smoking, but it must be a really good stuff.
I love Kickstarter, it is a great opportunity for many, but I can't see Activision Kickstarting Call of Duty. Ever.

Kickstarter was made so that it levels the playground for everyone a little. The little guys can get money and exposure, the dreamers can find their niche audience, etc. Activision has infinite cash and an army of PR staff. They enjoy they are in advantage. Everything Kickstarter can give you, Activision and their likes have ten times more. Actually, they could loose pretty bad on Kickstarter. What if the next Call of Duty does not get Kickstarted? That would be disaster. Call of Duty is more a marketing product than a gaming product. A botched marketing campaign will hurt them more than bad reviews.

And besides... all the major publishers already have a Kickstarter - they call it pre-orders. That is the way for them to get cash early and measure the audience response.

I think the biggest part of Kick-starters success is the fact it's open to all, but there's not an obscene amount of "big" players drowning out the rest of the projects. Its also amazing as it lets you fund something that is "niche" or in demand but traditional publishing or funding can't or won't fund.

The second you make it part of the pipeline, the big companies with their marketing budget will drown out all but a tiniest fraction of the smaller teams asking for small amounts. discover-ability will go out the window and then we're back to square one, with the big companies being in charge of who and what gets funded rather than people genuinely voting with their wallets on smaller projects they'd love to see happen.

Also the people spending money on KS right now, They know it's a risk, they know it may not turn out exactly how they want, but they take the gamble. They also do it to be closer to development, most small kick-starters have backer forums and take feedback regularly from their backers which helps shape a game. big studios simply can't work that way... And Im not sure the Masses of fans would accept it working that way.

For example If I paid £60 for GTAXXX on crowd funding etc I would literally just be pre-ordering 3 years in advance, any info they show me is potentially a spoiler, would I get a shoddy alpha build? Or am I literally funding them making a game in advance the same way they currently do. I just can't see it working. When I spend £60+ I expect either a product now that's pretty complete and bug free, or I expect to be part of a community helping shape a game.

I feel this line of thinking is the same as the "Mobile will kill consoles" line of thinking. When the reality is moderation will win, traditional publishing will continue to make the big games, some mid sized budgets will happen on crowd funding and surprise everyone "ohh gameX just got $10m", and the rare outliers like Star Citizen will continue to amaze. Crowd funding is fine and in a good place. I just don't see it being a substitute for a publisher putting up the cash for the mega projects.

Oh I realise that, but it's not like they're (usually) asking for raw donations! What I meant was that Kickstarter is basically just another way of exchanging goods for money, which is in no way obscene, even if you're already successful. :)

Crowdfunding is a great way to sell people things that already exist with a fresh coat of paint. Creativity and innovation sometimes requires going out on a limb to try things that people don't know they want yet, though.

I'm not sure how well the patronising "well obviously you hate money" schtick would go down in any other medium, where it's not automatically assumed that the only reason anyone would want to create anything would be to play at being an entrepreneur.

Just think about big movie studios. They all get money from elsewhere besides their own safes. It's nothing new, actually. The twist is that they are not asking for customers money upfront.
Great article, Tanya!

The author says that kickstarting a game is a great way to get some attention for it. That's true now. But in a world where everything is kickstarted, most games would get lost in the shuffle. We would probably get what we have now, with the announcement of a Call of Duty kickstarter getting all the attention. So little indie developers like Tanya should hope it doesn't happen.

It’s all about improving the supply and demand experience. Those who engage will win !

Crowdfunding is a great way to help field, nurture and market a concept from scratch to final master.

However the process is not as seamless and almighty as it could be.

Some crowdfunded devs quickly realised that their development process would benefit greatly from the input of their audience, but sites such as KS did not provide all the tools in one place. So the developers had to start hiring people to build and manage 3rd partly modules (websites) to ingest, disseminate and respond to backer input. Game developers, though more than capable, are not experts in building such frameworks and would rather be building the game. A crowdfunding site which adds modules to help do this, integrating backer input into the entire development process, will then provide a more attractive and complete experience.

The backers voice their desires and the developer supplies the solution, or at least the ones they are willing/able to.

Crowding, or huddling as I like to think of it, will be about funding, developing, marketing and even distributing if it wants to. Getting the whole process streamlined under one roof could really help engage both the developer and the audience in the experience.

Crowdfunding can absolutely be a good thing and very attractive business model, but this reminds me a lot of the 'everything but F2P is dead' hype of not long ago. No question crowdfunding can be a good thing, but Kickstarter growth has already slowed substantially ( 2012: $320M, 2013: $480M, 2014: $529M ) - part of that is a whole lot of broken promises came home to roost. And of course you still have to convince lots of people to fund you - there are still plenty of funding failures, even from big names. You have to already have a following (Exploding Kittens, Wasteland 2, Double Fine) or you have to have something so visually compelling and unique that people are willing to risk it anyhow (Hyper Light Drifter), and that's non-trivial.

What Charles Herold said. Whatever place is "the place to be" to get a leg up in PR, be that Steam or mobile or bundles, when everyone is there, the majority get very little from it. In the case of Kickstarter most will get nothing (either you set an unrealistically low goal, or you set a high goal, in either case it will be hard to convince backers). Selling alpha level games will be more attractive, because it will be an income that has no limit and you'll have less obligation.

That's one way where Kickstarter is likely to change if everyone is there, making the product creation a legal obligation where developers are forced to refund the money if the product isn't created. Which will take most indie devs off the platform, and put there only those who already have the money, just want some extras for extra features, like the current Shadowrun project.

Yes, I do think that selling games while still in development will become more commonplace, but I also think that developers will become more liable for these games, which will restrict this growth. As for AAA publishers, I think that there are many downsides to crowdfunding, mainly in terms of PR. It will kill their reveal timing, reduce their ability to change product schedules or features, all for no significant benefit. Sure, some would do paid betas, it already happens, but in most cases even that won't make sense. When tons of people are already willing to pre-order games, and publishers already play the review embargo card to prevent buyers from learning about the game's state, why would they choose a method which exposes their game to criticism much earlier on?

I really like the article - although I think it needs the word "Indie" inserted as the second word in the title, or something to define that this will not work for super-players in the industry or any cash-stable dev who likes their secrecy, etc., like several others above have said already.

I personally didn't Kickstarter a project I should have done a few years ago because I was concerned about being a brand-new company and a small team and needing to spend the money on buying art assets or employing an artist. Looking back, I wish I had at least given it a shot (maybe the project will make its campaign début in the future, who knows?) and reading several of the points above did strike a chord.

I do tend to agree that crowdfunding (other sites are available beyond KS) or an early access site which does give very early access alongside a dedicated forum or community resource will become a key driver of funding for tiny-to-medium-sized developers in the future. I can also see products routinely transitioning from one service to another as they move along their life-cycle: a smaller goal on a crowdfunding site which rewards with demo access and merchandise to get interest in the concept and build the community funds a demo, which gets accepted/paid onto Early Access and starts pre-selling final game access at a discount, then the retail game goes live at full price...

Kickstarter "growth slowing" is still real growth (10% 2013-14 using the figures quoted above) and I wonder how much of that is because of the range of options we have nowadays: Steam's Early Access being a major recent-ish player which I'm sure accounts for a significant portion of that slowdown as it relates to games, but also IndieGoGo and other sites have been present throughout the longer term, and Patreon as the "hot new thing". How much have these portals combined continued to grow the market for supporting/purchasing alpha-stage products, or are we seeing them genuinely eating into Kickstarter and no overall growth?

I suspect that these platforms are here for the long haul and we will continue to see more sites pop up with additional contribution/reward concepts over the 5 years this article covers. Not least of which will be more opening up of equity- or revenue-sharing-based investment sites as investment regulations shift.